alternative to banks ?

[shredder]

I recently found this link, Funding Circle | Funding for Business, Business Loans, Small Business Finance - Funding Circle . Looks very interesting as a lender, an alternative to zoppa, what do you guys think of it from both a lenders and borrowers point of view?

Btw I have no affiliation with the site/company in any way.

 

[Scottish Business Owner]

I really like to concept of this and I hope that they really take off. They could feasibly become a real alternative to mainstream banks. It looks like a proper site that makes all the right noises and covers alot of the information I would want to know before either borrowing or offering to lend.

It seems like a win-win for both borrowers and lenders (borrowers getting a decent rate and lenders getting a decent return). If the banking system worked like this then maybe we would have all the negative press we have about them just now.

I'm sure similar websites will crop up soon as well and hopefully they can help small businesses get the finance they need.

On a similar note i'd like to see something like the grameen concept used in certain parts of the country but that another discussion completely!

 

[Adventurelife]

I have been looking at Zoppa recently so good to see another in the market. I suspect we will see a few more of these coming on stream over the next few months/years

Excellent idea, and the rates for lenders are good. I think I will give it a go.

Obviously they will have to reach a critical mass stage to become a more mainstream alternative to bank funding.

I do hope they work though and more of them as well, anything that gives the banks a run for their money is good by me

 

[shredder]

Are their rates higher than for a Bank? I'm a bit concerned that if they are the loans will be a bad bet for investors. Then again the banks may be being too cautious. I really like the idea that as an investor you can sell on loans before they have been repaid.

I've never heard of the grameen concept before and had a quick google. If I've understood it correctly investors lend at nill or below market / not for profit rates and is based on the concept that all people have a right to obtain credit. I would have thought any investor prepared to do this would support / donate to a third world country before a Scottish or UK business. I'd also be uncomfortable thinking a Scottish business would think they would qualify for such support.

 

[Adventurelife]

Are their rates higher than for a Bank? I'm a bit concerned that if they are the loans will be a bad bet for investors. Then again the banks may be being too cautious. I really like the idea that as an investor you can sell on loans before they have been repaid.

I've never heard of the grameen concept before and had a quick google. If I've understood it correctly investors lend at nill or below market / not for profit rates and is based on the concept that all people have a right to obtain credit. I would have thought any investor prepared to do this would support / donate to a third world country before a Scottish or UK business. I'd also be uncomfortable thinking a Scottish business would think they would qualify for such support.

That is not what these sites are doing. They are profit for the lenders at present it seems to be in the 6-9% range. Their is profit for the company controlling the site. And borrowers get money at rates they will struggle to get at mainstream banks.

 

[Mike Lewis]

I really like the idea that as an investor you can sell on loans before they have been repaid.

But only if someone is willing to buy it. I can't help wondering what the advantage would be to the person buying the loan - compared to giving a new loan himself.

Mike